S3E1: Aldyen Donnelly on climate-crypto, COP26, and carbon accounting rules

Prior to COP26, there was a big problem in international carbon accounting. Both the country where a carbon credit was generated and the country where it was sold could count those very same credits toward their Paris climate commitments. COP26 seeks to remedy this issue with the practice of double entry bookkeeping. But is it too late? What are the unintended consequences of implementing the new rules now? Aldyen Donnelly is a cofounder, advisor, and former Director of Carbon Economics here at Nori. She also serves as a carbon markets advisor to several organizations, including Terramerra, Inc. and the Livestock Carbon Exchange. On this episode of Reversing Climate Change, Aldyen joins Ross and Nori CEO Paul Gambill to discuss how the new rules will lead to export controls for carbon credits and describe how such protectionism is likely to impact developing nations. Aldyen and Paul share their concerns around blockchain crypto projects like KlimaDAO and weigh in on why carbon removals are preferable to carbon avoidance credits. Listen in to understand why throughput might matter more than permanence and learn how the upcoming Nori token launch aims create a true price discovery mechanism for carbon that others can use. Key Takeaways [1:26] How COP26 adopted new rules to implement double entry bookkeeping [4:33] How a failure to implement double entry bookkeeping in prior carbon markets led to the price crash of 2012 [8:00] Why double entry bookkeeping was blocked until now [12:33] Paul and Aldyen’s fear that the new rules will lead to export controls around carbon credits [17:58] How export controls will negatively impact the carbon removal industry in developing nations [20:19] The 3-year window COP26 allows for the creation of an international carbon market oversight body (and the opportunity that gives us at Nori) [22:29] How crypto projects like KlimaDAO perpetuate a system where carbon credits are resold more than once and the underlying value isn’t actually one tonne [26:10] The loophole in COP26 allowing the backlog of carbon credits to be sold without double entry bookkeeping [28:05] What differentiates carbon avoidance credits from carbon removal credits (and why large corporations don’t necessarily care) [33:07] How Nori’s take on the fundamental constraint of carbon markets differs from that of KlimaDAO [35:30] How Paul and Aldyen think about permanence and why It's more important to focus on throughput [41:40] How the upcoming Nori token launch will create a price discovery mechanism for carbon Connect with Ross Purchase Nori Carbon Removals Nori Check out our other podcast, Carbon Removal Newsroom Resources Aldyen on Reversing Climate Change EP031 ‘Cryptocurrency Traders Move into Carbon Markets’ in The Wall Street Journal KlimaDAO Toucan Protocol Olympus Careers at Nori